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Thursday, August 1, 2013

Incentives for Solar and Wind Energy Suspended Again

PSC Delivers Another Blow to Beleaguered Renewable Energy Contractors

Immediate release -- For the second time in three years, state of Wisconsin incentives for customer-sited solar and small wind systems will be suspended, a result of recent Public Service Commission (PSC) decisions affecting Focus on Energy’s renewable energy budget . The suspension will take effect August 13, according to Focus on Energy, and will run through the remainder of the year. Incentives for biogas and biomass installations are not affected by the PSC’s decisions.

The impending cut-off of solar and wind incentives follows an across-the-board suspension of renewable energy incentives that lasted one year before being lifted in July 2012. Focus on Energy is authorized to spend up to $10 million per year on renewable energy incentives.

Through May 2013, Focus on Energy had spent or obligated a total of $3,048,580 for projects expected to be placed in service this year. The suspension ensures that overall renewable energy awards in 2013 will fall well short of the $10 million maximum.

In 2012, the PSC established a two-tiered funding formula that allocates renewable energy incentives based on resource type. So-called Group 1 resources—biogas, biomass and geothermal (ground source heat pumps)--are eligible for 75% of program expenditures up to a maximum of $7,500,000 a year. Funding for so-called Group 2 resources—solar and small wind—cannot exceed 25% of renewable energy expenditures.

Under this structure, outlays for Group 1 resources determine the overall funding level for renewables, even though up to $10 million is available in a given program year.As a result of the funding suspension, no renewable energy incentives will be available to residential customers until 2014. Residential customers account for approximately 60% of Focus on Energy’s program dollars.

The following represents RENEW Wisconsin’s reaction to the suspension of incentives for solar and wind energy systems. RENEW Wisconsin’s advocacy was instrumental in creating a renewable energy component to Focus on Energy."First, let's not stop these incentives simply because the accounting is difficult,” said Executive Director Tyler Huebner. “That may seem like the easiest fix for decision-makers in Madison, but this is going to cost jobs throughout Wisconsin, especially amongst the small businesses that do this work. Second, if the accounting is difficult, and we agree that it is, then let's change it. The decisions to make the accounting difficult were made by the same three Commissioners just last year, and this recent decision only adds to the complexity." “The disruption to solar and wind incentives will inflict measurable financial hardship on contractors operating here, and will result in a net contraction of sales and jobs. This decision will likely force these contractors to shift the focus of their business to other states that are doing a better job of supporting solar and wind.” “On several occasions before this decision, we communicated to the PSC the tenuous nature of the solar market today, and our best forecast of the likely impact from a disruption in the flow of incentives. By all appearances, the views of Wisconsin’s solar contractors were disregarded.”

“Yesterday, we sent a letter to the PSC asking it to reconsider this decision. This Friday, we will file comments with the PSC regarding future Focus on Energy planning, and our primary goal is to simplify the provision of incentives going forward. In our view, the current structure has proved to be an administrative nightmare, and this latest decision will worsen this already bad situation."“Finally, we don’t believe that providing policy support for the advancement of solar energy should be a partisan issue. It certainly isn’t in Georgia, where that state’s all-Republican utility commission ordered Georgia Power to acquire nearly 800 megawatts of solar by the end of 2016, effectively tripling what the state’s largest electric utility had already committed to provide.”“It’s time for Wisconsin regulators to see the light on solar and let it drive our state’s economy forward,” Huebner said.